List Now or Later? An Equilibrium Analysis of Advance-Booking Platforms

Many sharing platforms facilitate on-demand service to their guests and allow guests to reserve assets ahead of service. On such platforms, ''hosts''- asset owners who rent their assets- inform the platform beforehand about their asset's availability by creating a ''listing." By doing so, the hosts commit to the assets' availability at a future time. In practice, many platforms use dynamic pricing, and the hosts earn a share of the revenue generated by their assets. Hence, hosts' decision to list early or later is not trivial. We find empirical evidence of hosts' strategic decisions regarding whether to list early or later in the real-world data of one of the largest car-sharing platforms. On such asset-sharing platforms, hosts must decide (a) whether to create a listing for their assets on the platform and (b) whether to list early or later. We use the two-period game-theoretic framework to model a peer-to-peer sharing platform where guests differ in their times for reserving an asset and independent hosts who provide the assets decide if and when to list them. In this paper, we first theoretically characterize the region where no hosts list their assets early and, consequently, the platform cannot serve advance-booking customers. The result highlights the limitations of commission-rate contracts on asset-sharing platforms. Next, we find the optimal contract for such sharing platforms. Finally, we find that when hosts' opportunity cost of listing is below a threshold, delinking hosts' earnings from the platform's revenue through a constant-wage contract is optimal.